Leonardo SpA, LDO IM, ISIN IT0003856405, Milan Stock Exchange
LONDON, April 29, 2022 (GLOBE NEWSWIRE) -- Bluebell Partners Ltd has submitted, at the AGM of Leonardo SpA, a proposal for liability action1 against its Chief Executive Officer Alessandro Profumo.
With a first instance judgment published on the 7th April, 20212, Mr. Profumo was ruled to be guilty of false disclosure and market manipulation, in his former role as Chairman of the Italian listed bank, Banca Monte dei Paschi di Siena (“MPS”). Mr. Profumo was sentenced to six years of imprisonment, EUR 2.5 million in fines, five years of interdiction from public offices, two years of interdiction from the management offices of companies and was also declared unfit to contract with the public administration for a period of two years. The Tribunal of Milan defined Mr. Profumo a person of “social dangerousness” with a “marked capacity to commit crimes” and an “inclination to deceit”, disguised though a personality aimed at "offering an immaculate, providential and saving image” of himself.
Mr. Profumo is also facing investigations at a second criminal proceeding (No. 33714/16 RGNR Mod. 21 and No. 3502/17 RG GIP) for false disclosure and market manipulation, whose scope was enlarged on the 24th February, 2022, to include the addition of a criminal offence of misstatement in prospectus, in the list of charges.
Without prejudice to the presumption of innocence until a final judgment is given, the seriousness of the grounds considered to produce the judgement published in 2021, albeit at first instance, severally undermines the relationship of trust between Leonardo SpA shareholders and its CEO Profumo.
We at Bluebell Partners are not aware of any CEO of a publicly listed company in Western Europe or in the US, who holds office with a comparable criminal record or one who has refused to step-down once recognised as being guilty of committing a serious financial crime. The situation is even more grotesque if one considers that Leonardo SpA is Italy’s largest industrial group, where the Italian Ministry of the Economy and Finance (the “Italian MEF”) is the reference shareholder and Leonardo SpA’s business requires constant interactions with governments and governmental agencies around the world.
The current situation can only be explained by the fact that Mr. Profumo continues to enjoy strong political backing by the Italian MEF, which holds 30,20% of the share capital. We find this alarming, simply unjustifiable, especially when one also considers that over the last few months, Leonardo SpA has become embroiled in a failed negotiation of military ships and aircrafts to the Colombian army, with an opaque intermediary role played by a well-known Italian politician3.
The Italian MEF, which is also the controlling shareholder of Banca Monte dei Paschi di Siena with 64,23% of the issued share capital, opposed a proposal filed by Bluebell Partners against Mr. Profumo at the bank’s AGM held on the April 12th, 2022, for a liability action against him. Seemingly this demonstrates further, the political favour enjoyed by Mr. Profumo. Excluding the Italian MEF, which had sufficient shares to block the proposal, only 0,14% of MPS’ shareholders voted in line with the Italian MEF to oppose the liability action against Mr. Profumo.
However, in contrast to MPS, the Italian MEF does not have the full majority of Leonardo SpA’s issued share capital.
It is for this reason why it is essential for Leonardo SpA’s fellow shareholders to vote “FOR” the proposed liability action (“Vote for resolution on proposed liability action against the Chief Executive Officer submitted by the Shareholder Bluebell Partners Limited”).
A resolution in respect to a liability action must entail the automatic and immediate removal from office any director against whom the action is brought, if the resolution is passed with the at least one-fifth of the issued share capital (art 2393 civil code). In such an event, the Board of Directors would have to appoint a new Chief Executive Officer.
As ESG considerations play an increasingly important role as part of the investment community, shareholder Bluebell Partners Ltd finds it morally unacceptable that a person found guilty (even as the result of a judgment of first instance) of committing a serious financial crime, could maintain their position as Chief Executive Officer or indeed maintaining any directorial role in a publicly listed company.
This is particularly salient when one considers that the reference shareholder is the State.
Bluebell Partners Ltd
info@bluebellpartners.com
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1 https://www.leonardo.com/documents/15646808/21412795/ENG+Bluebell+proposta+14+April+2022+def.pdf?t=1649966922538
2 First degree sentence: https://www.dropbox.com/sh/j2ksby27ielq4az/AABGkbnj0afRB_imdcQKstuLa?dl=0
3 https://www.dropbox.com/home/Appendix%201-22
